Biofuel is a generic terminology referring to the fuels derived from biomass, such as plant, algae, or biowaste. In contrast to traditional fossil fuels which are generated through long-term geological processes (which might take centuries), biofuel is regarded as a renewable energy resource since the feedstock can be regenerated easily in a limited period of time. However, like other natural resources such as coal, petroleum, and natural gas, the composition of biofuels is also complicated and generally varies from each other according to different sources. The complexity of biofuel constituents causes challenges and difficulties for better understanding of the reaction mechanism, since the evolved chemical reactions are of huge numbers and most of which are highly convoluted. Therefore, it is necessary to select several typical model compounds which could roughly represent the main components of biofuel, so that better understanding of the reaction pathways and overall control of the reaction processes can be realized. For example, an estimation of several crucial properties of the product oil including the gas/liquid/coke yield, the aromatic content, the oxygen content, the total acidic number, the viscosity, the density, the average molecular weight, and the yields of typical distillates can be achieved and used as a reference to control the upgrading process of real biofuel feedstocks. This chapter mainly focuses on the studies regarding mechanisms of biofuel conversion under methane environment, which is mainly embodied by the evolution of model compounds.In spite of the complexity and diversity, the main components in biofuel and related products can be roughly classified into five groups, including (1) carboxylic acids such as formic, acetic, and propionic acids, which contain at least one carboxyl group (-COOH); (2) alcohols and phenols such as methanol, ethanol, ethylene glycol, and methyl phenol, which contain at least one hydroxyl group (-OH); (3) esters such as methyl formate, ethyl acetate, and butyrolactone, which contain at least one ester group (-COO-); (4) aldehydes such as formaldehyde, acetaldehyde, and ethanedial,